Court of Appeal Upholds Joinder of Parties and Apportionment of Costs in Flitcraft Limited & Ors v Philip Price & Anor: Key Insights into Patent Infringement Claims

Introduction

The recent judgment of Flitcraft Limited & Ors v Philip Price & Anor in the Court of Appeal (Civil Division) offers significant insights into several legal principles relevant to patent infringement claims, joinder of parties, and apportionment of costs in intellectual property litigation. The decisions underscored the importance of credible evidence, the substantive and procedural aspects of exclusive licensing in patent law, and the discretion applied by trial judges in matters of costs.

Key Facts

The case involves litigation over intellectual property rights between the claimants - Mr. Price and Supawall Limited - and the defendants - Flitcraft Limited and associated individuals. The claimants sued the defendants for infringement of patents, copyright in photographs, and passing off. The matter further complicated by the issue of whether the patents vested in Mr. Price as he originally claimed, or had passed to his trustee in bankruptcy, given a purported and later discredited assignment to a third party.

There were two appeals for the court’s consideration: the first challenged the decision to permit Supawall to amend proceedings to include the Official Receiver (OR) as a party, and the second addressed the costs order made by the lower court judge.

Legal Principals

Joinder of Parties

The principle issue in the first appeal was the application of section 67(3) of the Patents Act 1977, which states that in proceedings taken by an exclusive licensee, the patent proprietor must be made a party. The lower court allowed Supawall to join the OR (as the proprietor of the patents post-bankruptcy) after judgment on liability. This decision was based on the understanding that section 67(3) is procedural, aiming to ensure remedies can be allocated between the licensee and proprietor and protect defendants from successive litigation. The Court of Appeal upheld the lower court’s exercise of discretion in this regard, considering the purpose of section 67(3) and the specific circumstances, including that Supawall’s claim did not depend on the falsity of Mr. Price’s ownership claim.

Costs Apportionment

The second appeal dealt with the apportionment of costs between Mr. Price’s and Supawall’s patent claims. The key legal principle considered was the general rule that costs follow the event, subject to the court’s discretion considering numerous factors, including the parties’ conduct. In patent litigation involving multiple parties, a 50/50 split in costs between the proprietor and exclusive licensee was deemed a starting point, subject to adjustments reflecting the trial’s focus. The court maintained significant discretion in evaluating which party should bear which proportion of costs. The Court of Appeal did not find any flawed discretion in the lower court’s decision to apportion costs, especially given that Mr. Price’s claim was based on unfounded allegations while Supawall had a separate legitimate claim.

Outcomes

The Court of Appeal dismissed the first appeal, allowing the amendment to join the OR, and agreeing that this joinder did not substantially alter Supawall’s case. The second appeal was also dismissed, with the exception of setting aside an interim payment order against Supawall. The court found no error in the judge’s discretion in apportioning costs, nor inconsistency with his own guidelines, thus upholding the general principle that costs apportionments are within the purview and expertise of the trial judge.

Conclusion

The Court of Appeal’s judgment in Flitcraft Limited & Ors v Philip Price & Anor reaffirms that procedural rules governing the joinder of parties in IP litigation, such as section 67(3) of the Patents Act, are designed to ensure fair dealings and prevent multiplicity of proceedings. It also illustrates the court’s latitude in apportioning costs in complex litigation, with due consideration to the conduct of the parties, and underscores the autonomous nature of exclusive licensors’ rights in patent infringement claims. This case serves as a cautionary tale about the repercussions of pursuing a claim based on false assertions and the importance of evidence integrity in court proceedings.